B.C. experts to look at municipal taxes

A review of B.C. taxation will include municipal rates imposed on mills and other industrial customers.

An expert panel has been appointed to compare B.C.’s taxes with other places around the world that have attracted new investment, and the review will include industrial taxes imposed by local governments.

Finance Minister Kevin Falcon announced the new panel at a Vancouver Board of Trade luncheon Tuesday. It is to report back to the government by the end of August, after reviewing B.C.’s system of rebates, labour tax credits and other programs that affect business.

In interview after his speech, Falcon said former deputy minister of community and rural development Dale Wall was named to the group to examine tax rates on forest product mills and other industries. The B.C. government has made efforts before to address industrial rates, which in some communities are many times the residential rate.

Falcon said he does not intend to impose rate reductions on municipalities. The review is to compare B.C.’s tax system internationally and find ways to offset the impact on business from the return to the provincial sales tax that has to take place by the spring of 2013.

The review does not imply that the harmonized sales tax will disappear any earlier than planned, Falcon said.

“Obviously there’s a selfish political reason why I wish I could just publicly state we can beat that timeline,” he said. “But I can’t do that responsibly, so I won’t, and I’ll accept the criticism.”

In his speech to business leaders, Falcon also repeated his warning to public sector unions that there will be no new money in his upcoming budget to fund wage increases. Any raises for government workers would have to be funded from efficiencies found within other operations, he said.

Falcon wouldn’t comment directly on the B.C. Government Employees’ Union proposal to open liquor stores on Sundays to generate more revenue, but he left the door open for such solutions.

“What I want to see is savings that are real, and revenue generation that is real, that comes about as a result of improvements in productivity or how we do business, that we can then apply to modest wage increases,” he said.

Falcon also announced a new online budget simulator (www.gov.bc.ca/mybcbudget) where people can alter taxes or spending and see the result in actual figures from the province’s $40 billion operating budget.

He said the simulator is designed for public education, to “demystify the budget process” and show how every spending or tax increase affects the rest of the government.